December8, 2018

The Centers for Medicare & Medicaid Services (CMS) recently announced that they will reduce funding for Minnesota’s reinsurance program by approximately $100 million for the 2019 plan year

WASHINGTON- U.S. Senators Amy Klobuchar and Tina Smith, and Representatives Tom Emmer, Collin Peterson, Rick Nolan and Betty McCollum urged the Centers for Medicare & Medicaid Services (CMS) to reinstate full funding for Minnesota’s reinsurance program.Although CMS indicated that Minnesota should expect $183,930,230 for plan year 2019, the state received a letter on November 30, 2018 stating that Minnesota would receive only $84,757,861 –which would be about $100 million less than the anticipated amount. Minnesota’s reinsurance program stabilizes the state’s insurance marketplace to ensure that more Minnesotans have access to affordable, quality health care.

“A sudden notification that CMS would be reducing federal funding by roughly $100 million just one month before the 2019 plan year has created significant uncertainty for our state, and to date CMS has offered no explanation for why this dramatic reduction in funding has occurred,” the members wrote. “We strongly urge CMS to reconsider its decision and provide a level of pass-through funding for Minnesota that more closely matches the figure provided in the original 2017 agreement.”

The full text of the letter can be found below:

Dear Administrator Verma and Secretary Mnuchin:

We write to express our serious concerns in response to the recent decision from the Centers for Medicare & Medicaid Services (CMS) to reduce funding for Minnesota’s reinsurance program by approximately $100 million for the 2019 plan year.

On September 22, 2017, CMS approved Minnesota’s 1332 State Innovation Waiver to implement a reinsurance program and outlined the funding that Minnesota could expect to receive for plan years 2019 through 2022. Although CMS indicated Minnesota should expect $183,930,230 for plan year 2019, the state received a letter on November 30 of 2018 stating that Minnesota should expect only an estimated $84,757,861 – about $100 million less than the anticipated amount.

Minnesota’s 1332 waiver was an agreement with the federal government to stabilize the state’s insurance marketplace to ensure that more Minnesotans would have access to affordable, quality health care. A sudden notification that CMS would be reducing federal funding by roughly $100 million just one month before the 2019 plan year has created significant uncertainty for our state, and to date CMS has offered no explanation for why this dramatic reduction in funding has occurred.

We strongly urge CMS to reconsider its decision and provide a level of pass-through funding for Minnesota that more closely matches the figure provided in the original 2017 agreement.

We also respectfully request responses to the following questions:

What were the methods and assumptions used when calculating the pass-through funds for plan year 2019? Please also explain the $100 million discrepancy from the estimated amount for plan year 2019.

Was the effectiveness of Minnesota’s reinsurance program in reducing premiums a factor for the recalculation of pass-through funds, and if so, to what extent?

Have you reviewed the reasons for this reduction with the state and provided them an avenue to appeal your calculation? If not, when do you plan to provide this information? And what are the state’s options to appeal?

What steps can Minnesota take to prepare for future plan years to avoid the uncertainty that stems from pass-through funding that is inconsistent with the estimated figures outlined in the 1332 waiver approval letter?